Iowa Personal Lines Latest Update Graded A+

Iowa Personal Lines Latest Update Graded A+ DP-1 Basic Form Dwelling Policy: Provides coverage on a named peril basis. DP-1 Losses are paid actual cash value Extended Coverage Perils W.C. SHAVVER: Wind, Civil Commotion, Smoke, Hail, Aircraft, Vehicles, Volcanic Eruption, Explosion, and Riot DP-2 Broad Form Dwelling Policy: Provides replacement cost coverage on dwellings & buildings on a "named peril" basis, contents are actual cash value Uninsurable (excluded) losses Under the open- peril insuring agreement include damage caused by rust, mold, wear and tear, birds, insects, vermin, domestic animals, and continuous or repeated seepage from water systems DP-3 Special Form Dwelling Policy: Provides replacement cost coverage on the dwelling and other structures on an "open peril" basis, contents are on a named peril basis Exclusions to all Dwelling forms Ordinance or law, earth movement, water damage, power failure, neglect, war, nuclear hazard, intentional loss, and governmental action "Other Insurance" clause of Dwelling Property Provides for distributing insurance among two or more insurers on a pro-rata basis "Loss Payment" condition The loss will be paid within 30 days following agreement with the insured Automatic increase in insurance An endorsement used to provide an annual increase of 4%, 6% or 8% in coverage A of the dwelling property forms Broad Theft coverage Covers theft of personal property for any dwelling policy written on a dwelling, co-op, or condominium unit that is owner-occupied, or a tenant in an apartment Dwelling under construction Insures the named insured while the dwelling is under construction. The limit of liability is a percentage of the value of the partially completed home at any given time Dwelling: Coverage A Dwelling Dwelling: Coverage B Other Structures Dwelling: Coverage C Personal Property Dwelling: Coverage D Fair Rental Value Dwelling: Coverage E Additional Living Expense Other Structures Structures on the premises set apart from the dwelling by a clear space such as detached garages and swimming pools (sheds, kids playhouse, etc) Fair Rental Value Provides for the loss of rental income when a loss under Coverages A, B, or C makes property that is rented or held for rental "unfit for normal use" The Dwelling Property Covers Property Coverage Only Insurance A contract or device for transferring the risk of loss from a person, business or organization to an insurance company that agrees, in exchange for a premium, to pay for losses through an accumulation of premiums Law of Large Numbers The larger the number of insureds, the greater the probability that actual loss experience will equal expected loss experience Insurable interest Occurs when a person stands to lose life or property. An insurable interest must exist at the time of loss. Risk The uncertainty or chance of loss. Pure Risk Involves only the possibility of loss or no loss Risk Management A scientific approach to the problem of dealing with pure risk. Example: the elimination of a hazard Hazard A condition that creates or increase the probability of a loss Physical Hazard Those that increase the possibility of a loss such as flammable substances Moral Hazard Dishonesty, lack of integrity Morale Hazard Careless attitude, indifference, failure to care Peril The cause of possible loss: the event insured against. Loss The unintentional decline in, or disappearance of, value due to contingency Direct Loss Financial loss resulting directly from a loss to property Indirect Loss The result or consequence of a direct loss Actual Cash Value The cost to replace an item of property at the time of loss, less an allowance for depreciation (Dwelling) Replacement Cost The cost to replace a damaged or destroyed item of property, without deduction for depreciation (Homeowners) Market Valuation The highest estimated price that a buyer would pay and a seller would accept for an item in an open and competitive market Stated Value Insurance Policies Cover property for a previously agreed upon price regardless of the actual cash value. Sometimes called " Assigned Value Insurance" Salvage Value The estimated selling value of any asset, after it has reached the end of service life or its value has depreciated substantially Loss Settlement Provision 1 Paying the value of the damaged property Loss Settlement Provision 2 Replacing or Repairing Loss Settlement Provision 3 Taking the property at the agreed value Loss Settlement Provision 4 Repair, rebuild or replace with other property of like kind and quality Right of Salvage Damaged property that can be retrieved, reconditioned and sold to reduce an insured loss Abandonment A policy condition stating that the insured cannot abandon damaged property to the insurer and demand to be reimbursed to its full value Proximate Cause An action that produces a loss Deductible Dollar amount the insured must pay on each loss to which the deductible applies. Indemnity Principle of insurance that provides that when a loss occurs, the insured should be restored to the approximate financial condition occupied bored the loss occurred, no better or no worse Limits of Liability Maximum amount the insurance company will pay for a particular loss or for losses sustained during a period of time. Also called limit of coverage, limit of insurance and policy limit Coinsurance/insurance to value Policy condition that requires an insured pay part of a loss if the amount of insurance carried on property is less 80% of the value of property at the time of loss Occurrence A loss that occurs at a specific time and place or over a period of time Accident A loss that occurs at a specific time and place Cancellation Termination of an insurance policy by the insured or insurance company during the policy period Nonrenewal Decision made by an insured or insurance company to not continue coverage for another policy period after the current policy expires Vacancy The absence of both people and property from a premise (No belongings or people) Unoccupancy The absence of people from a premise (Property remains without people) Liability Losses arising from the unintentional negligent damage to property of others or to their body Absolute Liability Imposed without the need to prove fault or negligence (dog bites, workers comp) Vicarious Liability Imposes responsibility upon one person for the failure of another, with whom the person has a special relationship (parent/child) Bodily Injury Liability Includes injury, sickness, disease, and death resulting from any of these at any time Personal Injury Liability Injury other than bodily injury arising out of such things as libel, slander, false arrest, wrongful entry, violation of privacy, and malicious prosecution Property Damage Liability Damage to or destruction of property of others, including loss of use of the property Negligence The lack of reasonable care that is required to protect others from the unreasonable chance of harm Binder Oral or written statement that provides IMMEDIATE insurance protection for a specified period. Designed to provide temporary coverage until a policy is issued or denied Endorsements Documents attached to an insurance policy that changes the policy's original terms, conditions and coverages in some way Limitations Policy language that eliminates or reduces coverage under certain circumstances or when specified conditions apply Medical Payments Provided for bodily injury claims Blanket Insurance Coverage A single amount of insurance that is provided to all locations Specific Insurance Coverage A single amount of insurance for a specific location Theft Any unlawful taking of property of others, including burglary and robbery Burglary The taking of property by a person unlawfully entering or leaving the premises as evidence by visible signs of forced entry or exit (on the premises unseen) Robbery The taking or attempted taking of property by one who has caused or threatened to cause bodily harm, or committed a witnessed, obviously unlawful act (in person, physical contact) Mysterious Disappearance Vanishing of property with no explanation Warranties Specific agreements between the insured and the insurer that becomes part of the insurance policy. A breach can void the contract Representations Statements on an insurance application that that applicant believes are true. Cannot be voided on this basis Concealment The withholding of a material fact involved in the contract on which the insurer relies Certificate of Insurance Written form that verifies a policy has been written. Provides a summary of the coverage provided under the policy General Damages Provide compensation for pain and suffering, disfigurement, loss of limbs, and other subjective losses (injury, physical/mental) Special Damages Provide compensation for hospital expenses, doctor expenses and other objectives losses (financial loss) Punitive Damages Over and above general damages to punish the negligent party Compliance with FCRA Insurance companies wanting an investigative report on the credit & background history of an applicant for underwriting purposes must give notification to the insured within 3 days after the request. If coverage is declined, the applicant has the right to be informed of the name and address of the reporting company Declarations Section of an insurance contract that shows who is insured, what property or risk is covered, when and where the coverage is effective, and how much coverage applies Insuring Agreement Section of an insurance policy that describes what is covered and the perils the policy insures against Conditions Portion of an insurance policy that describes the rights and duties of the insured and the insurance company under the policy Exclusions Section of an insurance policy that lists property, perils, persons, or situations that are not covered under the policy Definitions Section of an insurance policy that clarifies the meaning of certain terms used in the policy Duties of the Insured Conditions found in property policies that explains the insured's responsibilities after a loss occurs (protect from further damage, give prompt notice of claim, submit to an examination under oath if required) Mortgagee Rights Specifies the rights and duties of the mortgagee under the policy (expected to pay the premium if the insured fails to do so) Proof of Loss Forms completed by an insured after a loss that provides an official inventory of damages Notice of Claim When the insured notifies the insurance company of a loss Appraisal Policy condition that outlines a procedure for when the insured and insurer disagree on the amount of the loss. 2 appraisers, 1 umpire. The amount agreed to by any 2/3 is the amount paid for the loss Other Insurance Provision Policy condition that sets out how any other insurance that applies to the same loss will affect reimbursement Assignment Condition in insurance policies that specifies that the policy cannot be transferred to another unless the company consents to the transfer in writing Subrogation The transfer to the insurance company of the insured's right to collect damages from another party Offer and Acceptance An application or premium quotation may constitute an offer. There is no requirement that the contract be in writing Consideration The companys' consideration is a promise to indemnify the insured in the event of a loss. The insured's consideration is the premium or the promise to pay the premium an and an agreement to abide by the conditions of the contract Competent Parties Both parties to the contract must be competent and capable of entering into a contract in the eyes of the law Legal Purpose Contracts must have legal object and cannot be for an illegal activity or an immoral purpose Sources of Insurability Information Producer applications, motor vehicle reports, consumer credit companies, and financial sources such as Dun and Bradstreet Privacy Protection (Gramm Leach Bliley) Financial Institutions must provide their clients a privacy notice that explains what information the company gathers about the client, where the info is shared, and how the company safeguards the info Gramm Leach Bliley This privacy notice must be given to the client prior to entering into an agreement to do business Opting Out The client can say "no" to allowing their information be share with affiliated parties Policy Application Contains the pertinent information when applying for insurance coverage Premium Payments Monthly, quarterly, semi-annually or annually Effective Dates of Coverage A policy begins and expires at 12:01 a.m. Standard Time Terrorism Risk Insurance Act (TRIA) Provides up to $100 billion in the event of terrorism attack Attorney General, Secretary of State, & Secretary of Treasury Three person of the federal government who make up the entity who certifies the act as terrorism Certified Act under TRIA Must be a violent act committed by someone resulting in damage in the US or to a US air carrier or ship, and result in aggregate losses in excess of $100 million Canceled by Insured The insured must pay the company the customary short rates and cost of action Canceled by Insurer The insurer may retain only the pro rata premium Flat Cancellation If the policy is canceled on the effective date by either the insurance company or the insured (no money involved) Arbitration A policy condition used to resolve other areas of disagreement besides those regard the value of a loss Professional designations Evidence that a person has successfully completed a course of study Discrimination A contract shall not be denied to an individual based solely on the fact that such individual has been or is believed to have been a victim of domestic abuse Misrepresentation Misrepresenting of benefits, advantages, conditions or terms of any insurance policy including false statements for the purpose of obtaining a fee from any agent or individual Twisting Any action for the purpose of convincing an insured to drop a policy of one insured in order to replace it with the policy of another insurer or encouraging prospective client to lapse a policy to their detriment Rebating An offer by an agent to give a part of the agent's commission to a prospective insured Advertising if done in any way which is untrue, deceptive or misleading is an unfair trade practice Claims Settlement Unreasonably delaying payment of claim, or misrepresenting policy provisions to claimant, or failure to give a reasonable explanation for denying a claim Defamation Making oral or written statements directly or indirectly which are derogatory or maliciously critical of another person or disparaging of other insurers Boycott, Coercion and Intimidation Tending to result in unreasonable restraint of the business of insurance are unfair trade practices Iowa Insurance Fraud Act The purpose of the act is to reduce premiums and to assist prosecutors of criminal fraud Insurance Fraud Bureau Investigates fraudulent claims: Have the same powers as law enforcement officers Guaranty Association To protect persons against failure in the performance of contractual obligations because of the impairment or insolvency of the member insurer which issued the policies or contracts FAIR plan Designed to provide insurance to property owners in inner city and other high risk areas who are unable to obtain insurance through normal market channels because of the location of their property or other factors over which they have no control